Child Development and Public Policies
Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)
- Chair: Francesco Agostinelli, University of Pennsylvania
Money Versus Time: Family Income, Maternal Labor Supply, and Child Development
AbstractWe study the effect of family income and maternal hours worked on child development. Our instrumental variable analysis suggests different results for cognitive and behavioral development. An additional $1,000 in family income improves cognitive development by 4.4 percent of a standard deviation but has no effect on behavioral development. A yearly increase of 100 work hours negatively affects both outcomes by approximately 6 percent of a standard deviation. The quality of parental investment matters and the substitution effect (less parental time) dominates the income effect (higher earnings) when the after-tax hourly wage is below $13.50. Results call for consideration of child care and minimum wage policies that foster both maternal employment and child development.
Understanding the Effects of Workfare Policies on Child Human Capital
AbstractWorkfare policies induce people to work more and thus increase their economic self-sufficiency. However, as parents spend less time at home, workfare policies might have negative effects on children's development. I study the mechanisms by which workfare policies affect children by exploiting experimental evidence from “New Hope” (Milwaukee, 1994-1997). The program randomly assigned an earnings subsidy—similar to the EITC—and a child care subsidy subject to a full-time work requirement to a group of economically disadvantaged families. For families with children who were in their preschool years while they were exposed to New Hope, I find that the program increased labor supply, family income, and center-based child care use during the eligibility period. Notably, the program had sizable short-term effects on child academic performance. Counterfactual experiments from a dynamic-discrete choice model indicate that most of the effect of workfare policies on child human capital is explained because parents, induced by the pro-work incentives embedded in New Hope, enrolled their children in center-based child care
'Prep School for Poor Kids': The Long-Run Impact of Head Start on Human Capital and Productivity
AbstractThis paper evaluates the long-run effects of Head Start using large-scale, restricted 2000-2013 Census-ACS data linked to date and place of birth in the SSA’s Numident file. Using the county-level rollout of Head Start between 1965 and 1980 and state age-eligibility cutoffs for school entry, we find that participation in Head Start is associated with increases in adult human capital and economic self-sufficiency, including a 0.29-year increase in schooling, a 2.1-percent increase in high-school completion, an 8.7-percent increase in college enrollment, and a 19-percent increase in college completion. These estimates imply sizable, long-term returns to investing in large-scale preschool programs.
- I3 - Welfare, Well-Being, and Poverty
- H3 - Fiscal Policies and Behavior of Economic Agents